It was recently brought to my attention that a certain financial author is preaching to business owners that “slow and steady wins the race.” While there might be some truth to this it does not take into account who the business owner is and what is that business owner’s end goal. These are important factors to take into account when determining what pace is right for your Michigan business.
It should be noted that the individual delivering this message filed for bankruptcy protection and two decades later has a net worth estimated around $55 million. I am sure any business owner would like that kind of slow and steady growth.
Different Types of Business Owners
If you are a business owner that is looking to create a job for yourself, then the slow and steady approach works great. You do not take on a lot of risk. You generally control of your own destiny for years to come. The slow and steady approach is conservative and generally is sustainable for the goal you are looking to accomplish. You likely will not grow your West Michigan business into a Midwest, National or International business, but you likely will have what most consider a nice lifestyle business.
Single-member limited liability companies are very common in Michigan. Most small business owners operate under this type of business entity. Some are even able to navigate the confusing system that the State of Michigan has set up on their own and been able to file their articles of organization and become a registered limited liability company or LLC with the State. So your personal assets are protected now, right?
Ummmm… Maybe. Look here is the deal: A creditor’s attorney is going look for any hole in your business entities shield and try and expose it, and because of that if all you have done is filed a document with the State and paid a filing fee, he is not just say, “Oh well, I guess there is no way this business owner is personally liable” and move on. So what do you need to do to close up those holes? Here are a few DO’s, DON’T’s, and RECOMMENDATIONS.
Crowdfunding isn’t a revolutionary concept. The idea that a lot of people can pool their resources to make something happen has been around for years. After economic disasters in the early 1900’s many securities laws became very restrictive in the idea that would protect the general public. This has forced people that want to pool resources to get creative with how they do that. Nearly a century later, the world has changed and we are finally seeing those previously restrictive laws are loosening a bit.
On December 30, 2013 Governor Rick Snyder signed the Michigan Invest Locally Exemption (MILE) into law. While this went relatively under the radar for most people, this law puts Michigan on the forefront of the crowdfunding revolution. This new tool for your business to use, while unfamiliar, should definitely be something you look into.
multi-million dollar status but I want you to think about it from a simplistic perspective. In order to be the “perfect entrepreneur” you have to a crystal clear 3D vision of your business. What this means is you need to be able to see your startup’s past, present and future all at the same time.
Let’s talk about business growth for second. Growing your business has become one of those cliché phases in the world of business. Everyone says they want their business to be bigger, faster and stronger but when you cut right to the bone, very few people are taking the necessary steps to actually grow their business.
Inc. puts out its annual Inc. 5000 list of the 5000 fastest growing private companies in the United States. In the most recent version of this list a business named ALL4 ranked 5000th on that list with 34% growth over 3 years. Over 3 years they increased their revenue from $3.5 million to $4.7 million and they added 9 jobs.
“I’ve got a business for sale. One verified, certified, legitimized business for sale. This is a can’t miss opportunity. Once in a lifetime. Once in two lifetimes. Never going to see a chance like this again. Forget that franchise. Drop the new business ideas. This is the business opportunity for you.” So now that you have one of the best companies in Grand Rapids, MI what do you do?
Developing a new business idea or buying a business opportunity is the easy part. While it can be stressful, overwhelming and seem like it might never come together, this is only a relatively small part of the process of being a business owner. What you do after determines the success or failure of your business venture. I am often asked “what is the best advice for a business?” Is there a secret to the business plan or special small business grant or something to business management?
Contracts are a major part of doing business. Businesses have contracts with customers, suppliers, contractors, employees, and even those among owners and the company. Whether your business deals with a lot of these transactions or just a few major transactions, it’s important that the contracts you are executing are drafted correctly.
So how do you review a contract to make sure it contains everything you need it to so you can protect your business? That is a very loaded question because while contracts are simple in nature (“an offer that is accepted”) there are complexities that can cause major issues. I often tell clients they could draft 80% of the agreement that I draft for them; it’s that other 20% that causes problems for them. There are 5 basic things that you should look for in a contract: 1) Parties; 2) Price; 3) Payment Terms; 4) Property; and 5) Signatures.
For obvious reasons we are big proponents of businesses hiring and forging a relationship with a business law firm that can support their business. Over recent months though it has come to our attention that not all business attorney’s support their business clients as they should. It has led us to ask you, does your business attorney help promote your business’ growth or does he get in your way?
Before we get too far ahead in this conversation, this is not meant as a criticism of any attorney. Every attorney that is licensed in the State of Michigan takes an oath to zealously represent every one of their clients and some have a different views on what that zealous representation entails. It is important to interview your business attorney even after you have been with them for a while to ensure their representation of you is what you want it to be. Now with that out of the way on to the important stuff.
Fear is a powerful force. There are people that won't get on elevators, won't fly, or won't get in front of a group and speak. Fear changes our decisions and causes some to go out of their way in order to avoid those situations. Many small business owners are afraid to grow their business. And the funniest part about it is that don't even know they have this fear.
In starting your small business you took a risk. You left the stability of larger established business in which you were an employee in order to start your own thing and do it the right way. You were able to grow your small business to a point that have been able to gain some stability and your business is actually turning a profit. So clearly you don't fear growth, right? Wrong.